Education

Education

All sustainable development- whether social or economic- is underpinned by education. As India seeks to reap its demographic dividends over the next couple of decades, it is critical that the country’s educational system improves in terms of reach and access, standards and pedagogical processes. Without a doubt, both formal education and vocational training represent huge opportunities in India. However, the sector is highly regulated- and though some opening up has started to happen, many regulatory challenges remain.

The subject of Education is on the concurrent list, which gives both the central government and individual state governments the authority to legislate. This results in state-to-state differences in laws. While pre-school education remains largely unregulated (except in certain states), primary, secondary and higher education institutions are highly regulated when it comes to aspects such as who is allowed to establish such institutions, admissions, fees, reservations for certain sections of society etc. The “Right to Education” Act has already caused heartburn among managements of private schools and it is arguable if the noble intentions of the Act have been achieved in letter or spirit.

Private universities are now allowed to come up and indeed, many Indian business groups are making significant investments into such ventures. There has been a lot of debate about allowing foreign universities to enter India and set up campuses. Foreign Educational Institutions (FEIs) are concerned about the requirement to mandatorily establish any educational institution in India as a not-for-profit body (e.g. Trust, Society or Section 8 Company under the Companies Act, 2013). This means automatic FDI approval is not available; there are also restrictions on repatriation of earnings.

The process of affiliations and approval of curricula is also cumbersome, given that different regulators oversee different courses (e.g. UGC, AICTE, MCI, DEC etc.) foreign universities to enter India and set up campuses. Foreign Educational Institutions (FEIs) are concerned about the requirement to mandatorily establish any educational institution in India as a not-for-profit body (e.g. Trust, Society or Section 8 Company under the Companies Act, 2013). This means automatic FDI approval is not available; there are also restrictions on repatriation of earnings.

In late 2013, the government proposed the UGC (Established and Operation of Campuses of Foreign Educational Institutions) Rules designed to permit foreign universities to set up campuses in India and award its degrees without having to partner with Indian educational institutions.

Vocational training and skill development is another area that is being highly emphasized by the government. The National Skills Development Council is looking at how the private sector can play a more active role in up-skilling millions of India’s urban and rural youth.

We can advise you on the best way to structure your entities so that you achieve the fine balance between the need for financial returns to investors, compliance with Indian regulations and setting up an ecosystem that attracts quality students. We can also assist you with specific aspects of your strategy and plans- e.g. acquiring adequate real estate at the preferred location, obtaining approvals to construct the campus, contracts with full-time and visiting faculty (including expatriates) etc.